No, it's not because his character is gay

Josh Gad provided the voice of beloved snowman Olaf in Frozen, an animated character his daughters 6-year-old Ava and 3-year-old Isabelle had begun to associate him with. Emphasis on 'animated'.

So when they first saw him as Le Fou in Beauty and the Beast, they weren't terrified because omg-look-daddy-is-playing-a-gay-character-what-is-this. They just couldn't brain seeing real-life Josh in full makeup, hair and costume.

"All they've ever seen me in was the snowman Olaf in Frozen," Josh told Jimmy Fallon on The Tonight Show. "So they saw me on the [Beauty and the Beast] poster and it terrified them."